*Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, avers the Central Bank of Nigeria and managers of the economy must evolve additional strategies, including trade policy shifts against inflation in the country

Isola Moses | 绿帽献妻

The Centre for the Promotion of Private Enterprise (CPPE) has said the influx of Foreign Exchange (Forex) into the economy is a key positive outcome that justified the recent decision of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) to maintain monetary tightness.

Dr. Muda Yusuf, Chief Executive Officer (CEO) of CPPE, stated this Wednesday, July 23, 2025, in an interview with the News Agency of Nigeria, in Lagos.

Yusuf, in response to the outcome of the 301st MPC meeting, said even if the CBN’s decision appears to hinder direct investment and growth, holding the current interest rates was anticipated.

Dr. Muda Yusuf, CEO of CPPE

He also noted although the decisions of the MPC were not surprising, the Bankers’ Bank and managers of the Nigerian economy must evolve additional strategies, including trade policy shifts against inflation.

绿帽献妻 had reported the CBN’s MPC retained the rates for the third consecutive time, holding the Monetary Policy Rate (MPR) at 27.5 percent.

The Bank equally retained the Cash Reserve Ratio (CRR) at 50 percent for Deposit Money Banks (DMBs), and 16 percent for Merchant Banks.

The banking sector regulator further retained Liquidity Ratio at 30 percent and the Asymmetric Corridor at +500/-100 basis points around the MPR.

According to Yusuf, the outcome of the MPC’s meeting was anticipated, based on current realities. The decision, he noted, has both positive and negative consequences for the Nigerian economy.

It was expected that current rates would be maintained due to CBN鈥檚 consistent approach of not cutting rates until inflation significantly moderates, Yusuf stated.

Despite marginal deceleration in annual inflation to 22.22 percent, month-on-month headline, food, and core inflation all increased June 2025, noted he.

The CEO of CPPE said the CBN cited inflationary trends coupled with persistent factors, including high energy costs, insecurity, exchange rate volatility and logistics expenses as reasons for its decision to retain the interest rate.

He stressed the need for more affordable funds to boost economic growth and investment, noting that interest rates exceeding 30 percent are highly prohibitive.

Yusuf stressed the CBN鈥檚 tight monetary stance, characterised by high interest rates, had successfully attracted an inflow of Foreign Exchange through portfolio investments.

He also stated that the influx of Forex was a key positive outcome that justified CBN鈥檚 decision to maintain monetary tightness.

According to him, CBN鈥檚 decision had several implications.

Financial instruments will continue to offer attractive returns, benefiting investors in these areas, Yusuf said.

The company executive averred: 鈥淗igh interest rates are also favourable for attracting portfolio inflows.

鈥淭he downsides included continued pressure on the real sector and borrowers, as the cost of servicing debts will remain high, potentially for at least the next two months until a policy review.

鈥淭he CBN and the managers of the economy generally should look beyond monetary policy instruments because, alone, it cannot tackle inflation.”

The expert as well emphasised that Nigeria needs factors that could reduce the cost of production, distribution, and cost importation of critical inputs for production.

Yusuf said: 鈥淭here are already some actions, we need more effective and impactful actions on insecurity, so that our food production can also be scaled up.

鈥淭hese are some of the additional things that need to take place on the policy front to complement whatever the monetary policy authorities are doing.”

The CEO of CPPE asserted: 鈥淐learly, monetary policy alone or monetary policy instruments alone are not sufficient to effectively tackle inflation.”

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